Why Entrepreneurs Struggle as Investors and What to Do About It
If you’re an entrepreneur, you already know how much of your success comes from optimism, resilience, and the ability to make things happen even when conditions aren’t ideal. Those traits are the engine behind every long night, every pivot, every moment you bet on yourself.
But here’s the uncomfortable truth I’ve been reminded of lately, especially through work in the Lifestyle Investor Mastermind: Entrepreneurs are usually not great investors.
And it’s not because they’re not smart or capable.
It’s because the very wiring that makes them exceptional business builders can work against them when they start investing.
In this blog, I want to unpack why this happens, the psychology behind it, and how high-performing entrepreneurs can invest wisely without falling into the traps that catch so many.
The Confidence Trap: When Business Success Spills Into Investing
A common pattern shows up again and again:
An entrepreneur starts crushing it.
Revenue climbs.
Their team is humming.
Momentum is on their side.
And with that success comes a natural thought: “If I can build my business, I can invest in someone else’s. How hard can it be?”
That confidence, earned through years of building, starts transferring to investment decisions. Suddenly, deals that deserve deep due diligence get waved through with a quick gut check instead.
No real underwriting.
No risk analysis.
No healthy skepticism.
Just belief.
And belief is a terrible substitute for an investment strategy.
Why Entrepreneurs Are Wired Against Good Investing
Here’s the core issue:
The traits that make someone a great entrepreneur are the exact traits that make them vulnerable as an investor.
Let’s break that down.
1. Entrepreneurs are wired for optimism.
Optimism is what gets you through the brutal parts of entrepreneurship.
But in investing?
Optimism blinds you to risk.
You start seeing opportunity everywhere because that’s how you’ve trained your brain to survive.
2. Entrepreneurs believe they can “fix” anything.
When a business hits turbulence, an entrepreneur goes into problem-solving mode.
That mentality doesn’t translate well to investing.
You can’t step in and “hack your way out” of someone else’s bad numbers, broken team culture, or flawed business model.
3. Entrepreneurs say yes more than they say no.
That bias toward action is powerful when you’re building.
But in investing?
Success is less about what you say yes to and far more about the deals you pass on. Every investment should start with no, then be proven why it can work out.
4. Entrepreneurs underestimate how different running a business is from evaluating one.
Operating skills do not equal investing skills.
A great athlete isn’t automatically a great coach.
The Hidden Cost: When Investments Start Hurting the Business You Built
I’ve watched this cycle play out over and over:
Entrepreneur invests in a deal they assume will perform.
That deal demands more attention than expected.
Their primary business, the one that actually prints cash, starts slowing down.
They bounce back and forth, trying to save both.
Eventually, they cut the cord on the investments… after losing money and time.
It’s not a capability issue.
It’s not even a discipline issue.
It’s wiring.
Your entrepreneurial strengths become vulnerabilities when you apply them to a domain that requires a completely different mindset.
So What Should Entrepreneurs Do Instead?
You absolutely should invest.
Your business shouldn’t be your only asset.
But you shouldn’t do it blindly or alone.
Here’s the healthier approach:
1. Build or join an investing environment that protects you from yourself.
Surround yourself with people who think differently: analysts, planners, risk managers. People who are real investors. A great place for this is The Lifestyle Investor Mastermind or The Tribe of Investors.
2. Create your investment criteria
If you’re naturally optimistic, you need a system that forces you to slow down and evaluate deals objectively. It’s never a good idea to have your emotions lead your decision on an investment deal. You should have your investment criteria lined out so that you’re approaching the deal with rules, guidelines, and logic. Not emotions.
3. Invest in ways that complement your life, not complicate it.
Your investments should reduce decision fatigue, not add to it.
4. Focus on strategies you fully understand.
If you can’t explain how the investment makes money, you’re not investing, you’re hoping. You’re simply a spectator gambling, with the hopes to hit a homerun.
Final Thought: You Don’t Need to Be the Analyst, You Just Need the Right Team
Being a great entrepreneur is a gift.
But when it comes to investing, that same gift comes with blind spots.
The key isn’t becoming a different person.
The key is creating a system that accounts for your wiring.
You don’t need to master investing to do it well.
You just need the right structure and the right people around you.
If you’re looking for support in building an investment strategy that protects your time, reduces decision fatigue, and aligns with your long-term goals, StoneCentury Financial is built for exactly that.
Just because you're wired like an entrepreneur doesn’t mean you have to invest like one.
